Local business owners rely on free USD legal clinic

Gwen Pierce and her interns, Emily Cohlheim of Eastlake High and Shyana Brown of High Tech High, assemble packets of the latest issue of "The Chocolate Voice" magazine for mailing out.
— Eduardo Contreras

Gwen Pierce and her interns, Emily Cohlheim of Eastlake High and Shyana Brown of High Tech High, assemble packets of the latest issue of "The Chocolate Voice" magazine for mailing out.
— Eduardo Contreras

University of San Diego legal clinic for entrepreneurs

San Diego County entrepreneurs who cannot otherwise afford a lawyer. Applicants must submit financial documents to establish income levels.

What legal issues are addressed?

•Obtaining business permits and licenses

•Drafting, reviewing and negotiating contracts

•Determining the appropriate form of business entity, such as sole proprietorship or corporation

•Providing advice on trademark and copyright issues

•The clinic does not assist with court matters such as lawsuits

How does it work?

If you are selected for a program, a law student will be assigned to help you with your case, under supervision from an attorney. Cases can take some time because law students are working within their class schedules. If a case takes longer than a semester, the law student assigned to that client passes the file to a student signed up for the next semester.

How much does it cost?

These services are free to the client, although clients must pay for any fees or expenses required by law. For example, if the clinic assists the client in filing incorporation papers, the client pays the filing fee required by the state. In many instances, there will be no fees.

Who qualifies?

Because its services are free, the Entrepreneurship Clinic focuses its efforts on assisting those who cannot otherwise afford a lawyer. In addition to income criteria, the clinic also considers how complex or simple the client’s legal needs are, the type of legal issues raised, and the client’s dedication to the business.

Information: Visit sandiego.edu/law and click on “Free Legal Assistance.” You can also call (619) 260-7470 or e-mail director Donna Matias at dmatias@sandiego.edu

Chula Vista resident Gwen Pierce wanted to be a positive voice for the African American community, so in 2007 she began publishing a magazine with inspirational content aimed at people of color.

“They helped me draft an advertising contract and contracts for writers, and helped me do research into copyright issues,” Pierce said. “I have this document that was drafted up for me, so I refer back to it.”

The USD legal clinic is among just two in Southern California (the other is at the University of Southern California) that help entrepreneurs with their businesses.

It limits its services to low- and moderate-income business owners in San Diego County despite requests from business owners in Los Angeles and Orange counties, said Donna Matias, the clinic’s director.

“We’re a San Diego school and we want to help people in our community,” she said.

The USD legal clinic doesn’t handle lawsuits, focusing more on “transactional” law such as drafting contracts, forming corporations and handling copyright issues. It was established to serve the needs of students who aim to be corporate lawyers, not litigators.

The clinic has closed 526 cases in the 10 years since it was established. It has assisted a wide variety of businesses, from pet sitting companies to restaurants and breweries, as well as business consultants, hairdressers and plumbers.

Many business owners go without legal advice because of the cost, which can be prohibitive for a struggling entrepreneur. The average billing rate for attorneys is $284 per hour, according to a 2009 study by Incisive Legal Intelligence. Business owners seeking legal advice at USD need to submit financial documents to prove they need the help.

Most law schools don’t offer legal clinics for entrepreneurs, in part because of the expense of paying attorneys to oversee each case. Law schools with legal clinics have traditionally focused on helping vulnerable individuals, such as people needing tax assistance, tenants in disputes with their landlords, and domestic violence victims, not businesses, Matias said.

In the 1990s, the University of Chicago was among the first law schools to establish a legal clinic for businesses as a way to train students who aimed to work in corporate settings, said Matias, who worked on that project and later came to USD. Today, about 50 U.S. law schools offer free legal clinics to business owners, sometimes in specialized areas such as intellectual property, community economic development or nonprofit organizations.

Matias said that the legal clinic is a way for USD to give back by helping struggling business owners achieve self-sufficiency.

“It’s not like we’re doing really complicated legal transactions for them, but from their perspectives it makes a huge difference,” Matias said. “You’re helping them help themselves.”

The legal clinic helped Pierce avoid costly mistakes with her magazine venture. She now asks advertisers to agree to contracts that clearly spell out billing terms, along with a printing-error disclaimer. “It certainly makes me do things more efficiently and conscientiously, instead of just jumping in,” she said.

San Diego business owners Rachel and Anthony Ruiz contacted the legal clinic in 2009 for help in establishing their company,Nexus Plumbing in San Diego. Anthony had worked in commercial plumbing for years, and decided to start the business when his employer began cutting salaries.

The couple filed paperwork on their own to establish the business as an S-corporation, and obtained a general contractor’s license. The law students helped them perform all the required tasks, such as drafting a shareholders’ agreement. “I wanted to register with the state as a minority-owned business, and they require lot of documents,” Rachel Ruiz said.

She said the clinic helped her to understand the business better. “It gave us the opportunity we probably wouldn’t have had, working with an attorney to learn the ins and outs of why we were doing certain things,” she said.

USD law student Arine Harapeti is in her second semester of working at the legal clinic. “You get the hands-on experience, and you see how the law and what you learn applies in real life,” said Harapeti, 23.

Her clients have included San Diego resident Antonio T.J. Johnson, who is applying for nonprofit status for a theater company.

Johnson, 58, is an actor who appears in local dramatic productions. Years ago, he was homeless because of his alcohol and drug abuse. That experience motivated him to establish what he plans to call the Vagabond Theater Project. He wants to offer dramatic classes for young homeless people at his church and host a theater festival at a local community college.

“Working in the theater kept me grounded and kept the magic in my life, and I want to offer that to other people,” he said.

Pierce’s magazine business is steadily growing. She’s on track to be profitable in June, with 200 paying subscribers. “It’s a ton of work, and I spend a lot of time on it,” she said, “but it’s a labor of love.”